Vincent Nair Managing Principal Australia New Zealand WIPRO
- Slides: 18
Vincent Nair Managing Principal, Australia & New Zealand WIPRO Infotech CIO Executive Council
AUSTRALIAN CIO DIALOGUES Will Outsourcing and Off Shoring do it for your Business?
The Agenda 1 2 3 4 5 6 7 Outsourcing Overview Trends in Outsourcing Evolution of GDM India as a Pivot in GDM India’s Competitive Tool – Why India? Indian IT Industry – Best Practices Future Evolution of Global Outsourcing
Differences – $ Savings & Technology Savvy Insource/Outsource/Off Shore Up to 50% Budget Savings Future Near Shore /Off Shore Future Outsourced but on Shore Future Co Sourced Infrastructure Future In Sourced Infrastructure Current 1 Off Shore 2 3 4 5 Time (Years)
The CIO Noise in Australia Peter Mahlar - CIO Coles Myer “ I want to know what is over the horizon. Don’t talk to me about bits and bytes. If I am going to invest millions with your company, you need to talk to me about the Future…” Peter Holland - Knowledge and Information Systems General Manager Toyota, Australia “ The days of an enterprise resource planning system sitting in the backroom churning away are gone… reducing day-to-day costs of running an IT shop will be the priority…” Michelle Tredenick – CIO National Australia Bank “ Skills shortage in some hot technology areas are looming…. we have to choose to outsource or off shore some of the work
Global Trends in Outsourcing IT Services & Offshore Market $ Bn Unite d States 2004 2009 (E) Total Offshor % IT ed ed to Servic India es 252. 1 7. 5 3. 0 5. 5 74. 0 % % Total Offsho % IT red Servic es 355. 0 14. 6 4. 1 % 1. Offshoring US and Western Weste 191. 6 is a key element 1. 7 0. 9 of outsourcing 1. 4 strategy 84. 3 in 258. 1 3. 7 Europe 1. 5 strategy – Is% a cost, quality, value based % rn 2. India – A pivot of the offshoring % Europdestination e 3. Trends indicate increasing momentum towards utilizing Indian capabilities in Asia the future 84. 6 0. 2 0. 3 0. 1 62. 1 121. 5 Pacifi % 1. Can Australia leverage % offshoring more? c 2. Has Australia explored Indian opportunities enough? Source: IDC 0. 9 0. 8 %
Outsourcing Trends in Australia For the most recent infrastructure services for which you have offshored, please select the types of services you have purchased India China Phillipines Singapore Malaysia Japan New Zealand 1 -4% 5 -9% Don’t know 10 -14% others 15 -19% 20 -24% 0 more than 30% 0 5 10 15 (% of responses) 20 % OF COST SAVINGS EXPERIENCED 5 10 15 20 25 30 (% of responses) 35 40 25 Preference for countries Source, IDC Australia Offshore Outsourcing Survey, 2005
The CIO Journey
Leading to 2 nd Generation Outsourcing
Evolution of Global Delivery Paradigm Future of Global Delivery Integrated Delivery Unified Processes for Customer Centricity Geo – Agnostic virtual delivery Source: Forrester
India as a Pivot in GDM Low Cost Global Delivery Player Worldwide Offshore IT Services Share by Region, 2004 2. 1% 1. 7% 3. 3% 3. 8% 4. 5% 2. 3% 6. 8% 75. 5% Total = $9. 8 Bn. India CEE Philippines Latin America MEA Others China Canada India well established on the Global Outsourcing Stage Source: IDC and Forrester
ICT = India’s Competitive Tool – Why? Performance 1 Abundant Talent Quality & 2 Scaleable Infrastructure Critical Ingredients of India’s success Operational 3 Excellence Conducive 4 Business Environment Growing 5 Domestic IT/ BPO Market = Low Highlights • India has 28% of suitable talent among all cost competitive offshore locations • Key stakeholders are taking initiatives to further enhance India’s talent proposition • Significant primary infrastructure is being built in leading centres • ~ 25 million sq feet of Class A real estate was available in 2005 • End-to-end network uptime for India and other offshore locations vis-à-vis US levels (~99. 95%) • India based players have managed to maintain quality and cost leadership vis-à-vis other countries • India’s business environment is competitive with those in other countries • Key government policy interventions have catalyzed growth • Increase in domestic spending on IT = High Source: Nasscom-Mc. Kinsey Report 2005, Wipro Estimates
Indian IT Industry – Innovating Constantly (1/2) Building complete services portfolio Pioneering the Global Delivery Model 1. Indian IT Industry: Value added Offshoring 1. 2. Leading IT companies have transformed into Full Service Providers 2. Wipro Example: Strong 360º Portfolio Vertical Focus Custom App Dev & Maintenance 30% R&D Services Testing 26% IT Enabled Services Consulting Infrastructure Package Services / 7% 5% Services Implementation BPO 10% 12% 10% India pioneered the Global Delivery Model Talent Development – A critical success factor Wipro Example: Global Delivery Capabilities
Indian IT Industry – Innovating Constantly (2/2) Quality Leadership Differentiation through Innovation 1. 80 of the world’s 117 SEI CMM Level 5 companies are based in India 1. New Service Lines 2. R&D centers by GE, Microsoft, IBM, DELL, CISCO, Intel etc. set up in India 3. 4. Wipro Example: The Wipro Way Process Excellence Customer Centricity Business Excellence Personal Change People Management 2. IP / Point Solutions based on deep domain understanding Non linear Business Models Business Impact SLA Delivery Wipro Example: Innovative Delivery
Future Evolution of Global Outsourcing Service Oriented Architecture Standards Based Components Virtualised Resource Model End to end Management Driving Business Agility Flexible Operating Cost Models Flexible Sourcing Models
Our Preparedness thru Integrated Delivery Framework PMO – Managed Services Cob IT Framework People Process Transition Phase Technology Life-cycle Management Initiation Phase Plan KAP & Planning Phase Implementation Phase Acquire Hand over to Sustenance Continual Improvement (Six Sigma) Customer Extranet IT Infrastructure (ITIL Practice) COCOON Reduction Deliver Application Services (SEI CMMi) Project management Defect Monitor Six Sigma Human Resources (PCMM) I PAT Quality Management Projects (PMI) Knowledge Management Veloci-Q K Net
Wipro Blueprint : Getting it right Outsourcing - What to and How to the first time 3 How to manage what is outsourced 2 1 What to outsource Application Assessment § Questionnaires/interviews § Study application inventory, documentation status, demonstrations of applications § Offshoreability of applications How to outsource 2 How to outsource Sequencing plan § Application sequencing plan § SLA’s § Risk mitigation § Performance metrics § Governance Model 3 How to manage what is outsourced Engagement approach § Engagement plan § Timelines for transition § Change management § Cost savings analysis § Cultural synchronization
Conclusion • CIO key competency today is Strategic Thinking and Planning vs operational management. • Outsourcing and Off Shoring is no longer an option but an enterprise wide business strategy. • India is the destination of choice for outsourcing and off shoring • All surveys point to ‘integration’ as the top most technology priority Questions to: Vincent. Nair@wipro. com
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